topic Re: Building towards CSP with no credit history in Credit Cards

Building towards CSP with no credit history

Anonymous — Fri, 08 Mar 2013 02:56:57 GMT

Been lurking around here for the past month and finally posting for the first time today, hoping to get some feedback.

I'm a graduate student (with ~$30K stipend income) studying in the US hoping to establish a solid credit history. Arriving 18 months ago from Canada, I was surprised that my credit history (6 years of monthly PIFs on two revolvers and a student loan) didn't carry over and that I was unable to obtain a credit card here. I opened a checking account at Chase shortly after arriving and after a couple of months, I asked about their credit products and they suggested that I apply for the Slate - I applied and was subsequently rejected due to a lack of history. Not knowing that I should recon (still not sure if it would have helped), I proceeded to apply for the Capital One Newcomer's card last summer. After several rounds of fax tag over two months where they repeatedly misplaced the documentation/pay stubs I sent them, they still couldn't verify my income and I just gave up.

Fast forward to last month when I came across this forum, I took the advice of applying for a card at my local credit union and received a Visa with a $1K CL. I proceeded to apply for the Amex Delta Gold, taking care to mention my existing relationship with Amex Canada when I submitted documentation for verification, and was approved with a $1K CL. I'm happy that I'm now earning rewards on my purchases and have started building my credit history and will grow it by PIF each month but the CSP looks really attractive (I do a bit of travel as a graduate student and the no foreign exchange fee would be handy whenever I visit family and friends in Canada - it's a pain to have to convert funds to pay my Canadian cards).

I am still unable to pull my TU/EQ but my EX score (from Amex) was 676 with only a utilities account reporting for the past 18 months. My EQ shows the card from the credit union reporting and the utilities account (the Amex is still too new). I also see two HPs from Amex and softs from Cap One when I applied last year. I'm not sure what the inquiries look like on my TU/EQ (I'm assuming that I would have some HPs from the Chase Slate app, the Cap One app, and my local CU) but I should find out shortly. I'm moving in August to a place which includes utilities, so I'll be closing the utilities account at that point, not sure how that will factor into things.

My current strategy is to simply obtain soft-CLIs from Amex and garden for 18 months or so (let the two new revolving account age) until the HPs from the Slate/CapOne falls off and apply for the CSP (after optimizing util the month before). Hopefully my scores would have risen a considerable amount by then and my Amex CL would approach/exceed the $5K expected for CSP approval. My AAoA and age of oldest account would probably set me back but hopefully that'll be offset by my young age and lack of recent inquiries.

Had a few thoughts of applying for another Amex at the start of next year (using my existing relationship and for backdating) or possibly the Freedom in a few months (something that I want to get eventually for the 10+10 but fear a wasted HP due to low AAoA and its influence on the eventual CSP app if Chase wants to limit its overall exposure) but my intuition from what I gather on this forum is that simply aging the two accounts would be the best course of action (unless they really want to see responsibility with >2 revolving accounts).

Really glad to have come across this community and would appreciate any input on my scenario. Thanks!

Re: Building towards CSP with no credit history

SnackTrader — Fri, 08 Mar 2013 05:41:01 GMT

Honestly, I think the detail of your post scared everyone away haha

You're definitely thinking through this stuff the right way, and you're off to a great start. Will the rewards on the CSP justify the AF versus just another 1%, no FTF card, like a Capital One or Discover? Given your current income, a $95 fee would be difficult to recoup...

Re: Building towards CSP with no credit history

toppers555 — Fri, 08 Mar 2013 06:04:32 GMT

@SnackTrader wrote:
Honestly, I think the detail of your post scared everyone away haha

You're definitely thinking through this stuff the right way, and you're off to a great start. Will the rewards on the CSP justify the AF versus just another 1%, no FTF card, like a Capital One or Discover? Given your current income, a $95 fee would be difficult to recoup...

+ 1 about AF. I know the desire ,and want for the metal card, but you also need to make sure you can afford it, and justfy it. If you want it , and the $95 bucks is not going hurt you go for it when it is time. I understand "prestige" that the card come with and I am a 25 year college undergrad myself. The key is in understanding your financial situation. For example I have a fulltime 65k+ year job I have been on for last 5+ years ,and have established credit. I really don't have a need for a CSP,but I want it. I can easily push 3k requirement though in a month for 40k bonus, and can just pay my tuition ( WHY DOES SCHOOL COST SO MUCH /rant) every few months, to rack up points. . You seem to be heading in right direction though , you have a good sense of credit from your post , but just a little warning not to get caught up in the CSP Siren , if it going to not help you.

Re: Building towards CSP with no credit history

Leadberry — Fri, 08 Mar 2013 06:11:51 GMT

From reading OP's one post, he seems pretty intelligent to me. He's clearly done his research and come up with a solid contingency plan. Judging by the way you guys are talking about a $95/year fee, you'd think he was living under the poverty line. I'm curious as to what makes you guys think he doesn't already "understand his own situation," or why you think he's not making "the adult choice." I don't think he's done anything to warrant such a heavy-handed lecture.

OP, good luck--I hope everything works out for you!

Edit: Someone pulled a ninja edit on me! Some of my statements no longer apply.

Re: Building towards CSP with no credit history

Anonymous — Fri, 08 Mar 2013 06:09:40 GMT

Yes, besides no foreign transaction fees, can you tell us more about why you want the CSP in particular? In reality, there may be other, less costly cards that may also meet your needs.

In addition to the Discover and Capital One cards already mentioned, I'll make a plug for a no-FTF card I currently have, the BankAmericard Travel Rewards. It earns 1.5% per dollar on all purchases (and 3% on travel booked through their website) and also has no AF and an EMV chip for international travel. I like it for everyday purchases, and it seems like it would suit your needs well.

Re: Building towards CSP with no credit history

SnackTrader — Fri, 08 Mar 2013 06:16:51 GMT

First of all, I gave no such lecture, so please do not group me in with the other poster's advice.

Second, I am not implying that the OP can't afford the AF, I was simply asking if the AF made sense for his spending. Affording an AF and profiting off an AF when compared to similar credit cards without an AF are two different things. Typically, a high level of spending is required to profit off an AF card. For example, if OP pays rent of $600 per month, that leaves only $22,200 remaining for credit card purchases. Then, lets take out all of the purchases that would only receive 1% cash back with the CSP, since many other cards offer 1% without an AF.

Then we keep digging, and that's how you determine if an AF is worth it. I make significantly more than $30,000 annually, and the CSP is in no way profitable for me.

Also, for the OP, just learned about the TD Bank First Class Visa Signature tonight. You should google it and see if it looks appealing (hint: it should). Plus, it's from the US subsidiary of a bank you must be very familiar with.

Edit: I agree that the OP sounds very smart.

Re: Building towards CSP with no credit history

Leadberry — Fri, 08 Mar 2013 06:27:23 GMT

@SnackTrader wrote:
First of all, I gave no such lecture, so please do not group me in with the other poster's advice.

Second, I am not implying that the OP can't afford the AF, I was simply asking if the AF made sense for his spending. Affording an AF and profiting off an AF when compared to similar credit cards without an AF are two different things. Typically, a high level of spending is required to profit off an AF card. For example, if OP pays rent of $600 per month, that leaves only $22,200 remaining for credit card purchases. Then, lets take out all of the purchases that would only receive 1% cash back with the CSP, since many other cards offer 1% without an AF.

Then we keep digging, and that's how you determine if an AF is worth it. I make significantly more than $30,000 annually, and the CSP is in no way profitable for me.

Also, for the OP, just learned about the TD Bank First Class Visa Signature tonight. You should google it and see if it looks appealing (hint: it should). Plus, it's from the US subsidiary of a bank you must be very familiar with.

Edit: I agree that the OP sounds very smart.

SnackTrader, my post was directed solely at toppers--I did not mean to offend. I understand I did not choose the correct wording for the situation. I also noticed that toppers edited his post and noted that my objections no longer apply.

Re: Building towards CSP with no credit history

toppers555 — Fri, 08 Mar 2013 06:39:14 GMT

@Leadberry wrote:
@SnackTrader wrote:
First of all, I gave no such lecture, so please do not group me in with the other poster's advice.

Second, I am not implying that the OP can't afford the AF, I was simply asking if the AF made sense for his spending. Affording an AF and profiting off an AF when compared to similar credit cards without an AF are two different things. Typically, a high level of spending is required to profit off an AF card. For example, if OP pays rent of $600 per month, that leaves only $22,200 remaining for credit card purchases. Then, lets take out all of the purchases that would only receive 1% cash back with the CSP, since many other cards offer 1% without an AF.

Then we keep digging, and that's how you determine if an AF is worth it. I make significantly more than $30,000 annually, and the CSP is in no way profitable for me.

Also, for the OP, just learned about the TD Bank First Class Visa Signature tonight. You should google it and see if it looks appealing (hint: it should). Plus, it's from the US subsidiary of a bank you must be very familiar with.

Edit: I agree that the OP sounds very smart.
SnackTrader, my post was directed solely at toppers--I did not mean to offend. I understand I did not choose the correct wording for the situation. I also noticed that toppers edited his post and noted that my objections no longer apply.

Yes I ninja you some of my wording was not the best.

Re: Building towards CSP with no credit history

Leadberry — Fri, 08 Mar 2013 06:46:23 GMT

Re: Building towards CSP with no credit history

myjourney — Fri, 08 Mar 2013 07:42:51 GMT

IMO and its just that IMO

I would consider the cap1 venture cards because of no transfer fees and a chase freedom card. Both have great rewards and then garden for while building a relationship with chase at the same time for the CSP

You have definitely displayed much thought into your game plan. Good Luck!

Re: Building towards CSP with no credit history

SnackTrader — Fri, 08 Mar 2013 14:00:41 GMT

My quote function isn't working, but no harm done, Leadberry.

Hope to hear back from OP soon so that we can figure out how to help with the game plan.

Re: Building towards CSP with no credit history

Anonymous — Fri, 08 Mar 2013 16:10:14 GMT

Thank you for all the card recommendations!

Discover has pretty poor acceptance in Canada (same with Amex when compared to here for everyday spend) so it'll be pretty useless even with no FTF. The TD card can be applied for using my Canadian credit but its rewards seem to fall behind the BoA/Cap One cards suggested to me (and it has a similar annual fee as the CSP). I would prefer getting a Visa Signature for its benefits so the Cap One comes out ahead of the BoA card in a one-to-one comparison.

At 1.25% for the no-fee Cap One card, the breakeven point is ~$12500 (I value UR points at 2c/mile through UA points transfer) to justify the $95 AF on the CSP. I spend roughly $500+ a month (so $6K+ annual spend) and I have around $2-3K of reimbursed travel expenses each year, which translates into $10K total spend as a conservative estimate. That $2500 difference is ~$19 a year and is easily accounted for by the differences in sign-up bonuses. So projecting rewards over the next three years (when I graduate and should receive a bump in salary/spend), the CSP comes out ahead by a few hundred dollars (not to mention it's a pretty metal card!).

The Amex Delta Gold AF is something that I'm not looking forward to, but I mainly got that to get my foot in the door with Amex. Fortunately the signup bonus will at least cover the AF for the next 2-3 years.

I see some recommendations to apply for the Freedom (and other no-AF CapOne cards) but would I be declined for lack of history (maybe I'm being overly protective of my inqs)? Should I obtain one or two more cards (now? or in a few months so that my two new cards have reported for a bit?) before gardening?

Re: Building towards CSP with no credit history

SnackTrader — Fri, 08 Mar 2013 16:17:35 GMT

In my opinion, applying now is not the best choice. You have some cards to work with, and clearly have the patience to wait for bigger and better things. I found 6 months in between apps to work well for "establishing" revolving history.

Also, great analysis on your rewards. It sounds like you have thought this through and I can't find any holes in your analysis, so good luck in obtaining what you want! Based on what you have posted here, you will find yourself in the good graces of US credit scores very soon.